For many years, foreclosures in the Miami-Dade area of Florida were avoided by homeowners at all costs since the stigma that went along with them could be crippling, even before a bankruptcy filing. However, that belief is changing thanks to tough economic times, reported lack of cooperation from lenders, and well-publicized bank bailouts provided in recent years by the U.S. government.
A columnist recently wrote about his California-based nephew, who willingly chose to stop paying his home mortgage even though he and his wife could still barely afford to make payments. With foreclosures taking an estimated 475 days to complete, the 34-year-old family man, is still actually living in his home. The man and his wife chose to stop making payments on their home once the high payments became increasingly difficult to make and they received no cooperating on refinancing from their lender, even after missing a few mortgage installments.
This maneuver, now called a “strategic default,” is something many Americans are turning to as their attitude toward big banks and commercial lenders continues to deteriorate. In many cases, with homes taking more than a year to go into foreclosure, families are able to live in them primarily for free as they try to recover, financially. However, the Federal Housing Finance Agency and Office of the Inspector General have said they will be looking for individuals participating in “strategic default” cases, which make up an estimated 20 percent of all foreclosures and attempt criminal prosecution on the basis of mortgage fraud.
Entering into any type of mortgage default due to financial crisis can be tremendously damaging to your personal credit. When your financial situation is nearing this level of difficulty, contact a Florida-based lawyer to discuss your options regarding mortgage default and bankruptcy. Seek guidance before making any life-altering decisions that could affect your credit – and possibly your criminal record – for years to come.
Source: Akron, “Foreclosure stigma absolutely lifting“, Tom kelly, July 18, 2013